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FairPoint calls on unions to help avoid bankruptcy

A FairPoint crew works in Montpelier recently.

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MONTPELIER – FairPoint Communications executives met with union leaders behind closed doors in Boston Thursday as the troubled telecommunications company continued to seek ways to avoid financial bankruptcy.

Executives from the company, which purchased Verizon's landline and Internet services in Vermont, New Hampshire and Maine last year, have been speaking with union officials about pay and other concessions for several months.

The company, which paid $2.4 billion for the network, is mired in debt and edging closer to a Chapter 11 bankruptcy filing, which would allow the North Carolina corporation to restructure.

FairPoint Vermont spokesperson Beth Fastiggi said Thursday afternoon that one cost-cutting effort that the company is looking at is negotiating a new contract with its union employees in the three states. She could not say how far along negotiations were or if the company expects a resolution soon.

"FairPoint's financial situation has been no secret," Fastiggi said Thursday. "One of the avenues that we are looking at is reducing our costs."

FairPoint employees about 620 people in Vermont and a "vast majority" of those workers are unionized, either with the International Brotherhood of Electrical Workers or the Communications Workers of America. Company and union officials representing about 3,000 workers have met regularly in recent months to exchange information and discuss ways FairPoint can reduce costs, said FairPoint spokeswoman Rose Cummings.

Both unions opposed the sale of Verizon's assets to FairPoint, warning that the company would be on shaky financial ground. Their warnings proved right – the company's performance in the three states has been disastrous since it switched over to its own computer network in February.

Mike Spillane, the business manager for IBEW, said after leaving the meeting on Thursday that the two sides are in heavy discussions on how to find safe financial ground, including possible concessions on both sides.

But he said all participants signed non-disclosure agreements and he could not go into details. Meetings are expected to continue within the next several days, he said.

"Today, for the first time, we really felt that the executives were listening to us," Spillane said.

In an Associated Press interview Thursday, Rand Wilson, the spokesman for IBEW and CWA, said FairPoint was "teetering on the brink of bankruptcy."

"That's been true for months and people have been saying it's not a matter of if, but a matter of when," he said. "But there's a feeling that it's about to happen."

Wilson said the unions are now committed to making FairPoint succeed.

"There's no satisfaction in saying, 'I told you so,'" he said.

Meanwhile, FairPoint has applied for $37.8 million from the federal government as part of its stimulus plan. If awarded, that money would be used to expand broadband access in Vermont, New Hampshire and Maine, according to Fastiggi.

Here in Vermont, the funds would be used to expand high-speed Internet access to 2,900 households, including large parts of St. Johnsbury, Lyndonville, Barnet, Danville, Sheffield, Guildhall, West Burke and Canaan. The cost of this part of the project is estimated to be more than $7 million.

Fastiggi said the company expects to hear in mid-November if the applications for stimulus funding were approved.

Tom Evslin, the state official who is transitioning from being Vermont's Recovery Officer to its Chief Technology Officer, said this build-out is in addition to what FairPoint has already promised the state that it would do.

"We did sign a letter of recommendation for this funding," Evslin said.

Daniel.Barlow@timesargus.com.